The Karnataka government today said employees of private schools and colleges as well as engineering and medical colleges and other educational institutes would come under the ambit of ESI, giving benefits to lakhs of people.

Labour minister B N Bachegowda made the announcement after a meeting to discuss insurance schemes for workers as well as social security covers for unorganised sections of labour.

Bachegowda said there was opposition to the move for some years by management of such institutions as it involved financial implications, but the government has now succeeded in taking them on board.

Labour department officials said employers now have to contribute 4.75 per cent and employees 1.75 per cent of salary to avail ESI benefits, which include unlimited medical cover and pension.

The minister also said 100-bed hospitals would be established in Bommasandra, Doddaballapura and Shimoga for workers at a cost of Rs 200 crore to Rs 250 crore.

In addition, ESI hospitals in Davanagere, Hubli and Mysore would be upgraded at a total cost of Rs 300 crore.

Bachegowda said to meet the shortage of doctors, it was decided to press into service part-time specialists and super-specialists.

The Minister said star hotels would be told they could not workforce on contract and that it should be permanent employment.